Low supply. low demand keeps rubber prices high

ERJ staff report (DS)

Kuala Lumpur -- Although demand for natural rubber has eased over the summer, low supply has kept prices at historic highs, albeit lower than the record highs seen in February this year. In the latest edition of its monthly publication Natural Rubber Trends & Statistics, the Association of Natural Rubber Producing Countries (ANRPC) said, "Natural rubber (NR) market has been increasingly fragile since the beginning of this month (August)."

ANRPC said, "Beginning from 9th August, key regional rubber markets have seen prices deviating from falling trend. The sentiments further improved since the fourth week of August. "

The report continues, "Supply of NR has slowed down further in July and the slow trend is expected to continue through August. Total supply from ANRPC's member nations is estimated to have grown only by 2.9 percent on year in July and the same low rate is anticipated for August also. This reveals a progressive decline in the output growth from the 10.5 percent rate attained in Q1 (January to March) and 4.9 percent rate during Q2 (April to June) on annualised basis. "

ANRPC's total supply anticipated for this year (January to December 2011) stands almost unchanged at the previously-reported 9.961 million tons, up 5.0 percent from a year before.

ANRPC sees China's imports down significantly. The report says, "China's import demand for NR (Including rubber compounds containing more than 95 percent NR) is anticipated to fall annually by 7.5 percent, to 680,000 tons during the third quarter of this year. "

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Press release from ANRPC